Nestlé has been added to Ukraine’s ‘sponsors of war’ list for its continued presence in Russia, joining food and drink peers Unilever, PepsiCo and Mars.
“Nestlé continues to operate in the aggressor state, supplying goods to its population and expanding its production base in the country,” the Ukraine government’s National Agency on Corruption Prevention (NACP) said in a statement today (2 November).
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As the world’s largest food maker and owner of the KitKat confectionery and Gerber baby-food brands was put on the agency’s so-called international sponsors of war register, a fate that included PepsiCo and Mars in September, the NACP added: “By continuing to work in the Russian market, Nestlé is once again demonstrating to the world its willingness to collaborate with the aggressor state.
“Nestlé’s Russia business also demonstrates to Russia itself that it continues to be integrated into the global market, despite numerous war crimes committed in Ukraine.”
The company pointed Just Food to an online statement, which reiterated moves to sell fewer products in Russia, as well as halting advertising and pausing capital investment.
“We refocused our activities on delivering essential and basic foods to the local people and suspended the vast majority of SKUs from our pre-war portfolio in the country. We have halted non-essential imports and exports into and out of Russia,” the statement reads.
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By GlobalData“We continue to fulfill our obligations toward our employees. We are fully complying with all applicable international sanctions on Russia and, for the foreseeable future, these measures will apply as our operations in Russia remain focused on providing essential and basic foods to the local people.”
In the wake of Russia’s invasion of Ukraine in February 2022, Nestlé reacted in March of that year by suspending capital investment in Russia and pulling all advertising. However, the Switzerland-headquartered giant pledged to continue providing essential goods, including baby food and breakfast cereals.
Later in March, the Purina pet-food maker responded to opposition from Ukraine’s President Volodymyr Zelensky and Prime Minister Denys Shmyhal over its presence in Russia, insisting it was not making a profit from the company’s “remaining activities” in the country.
NACP claimed today that Nestlé was still “operating seven factories in Russia” in the early part of 2022.
According to Nestlé’s 2022 annual report, the business was operating six facilities in Russia covering powdered and liquid beverages, ice cream and “milk production”, nutrition and health science products, prepared dishes, confectionery, and “petcare”.
There were no figures on sales or profits. In March 2022, Nestlé confirmed its Russia plants employed more than 7,000 people.
Nestlé also later insisted in March 2022 that it had also halted exports and imports to and from Russia but was still supplying baby food, breakfast cereals, “tailored nutrition and therapeutic pet foods for specialist retailers and veterinarian clinics”.
At that time, Nestlé said: “Going forward, we are suspending renowned Nestlé brands such as KitKat and Nesquik, among others. We have already halted non-essential imports and exports into and out of Russia, stopped all advertising, and suspended all capital investment in the country.
“Of course, we are fully complying with all international sanctions on Russia. While we do not expect to make a profit in the country or pay any related taxes for the foreseeable future in Russia, any profit will be donated to humanitarian relief organisations.”
Meanwhile, the NACP agency added today: “Despite the fact that the share of Nestlé’s revenue made in Russia is only slightly over 2% of its global revenue, the company has not yet decided to leave the market of the terrorist state.”
It claimed the publicly-listed business paid the equivalent of $25m into Russian “profit taxes” in 2021. Citing an “analysis of the Russian customs data”, the NACP added that in 2022 Nestlé imported $374m of “semi-finished products and raw materials into Russia”, and $271m in the first nine months of this year.
